Andrew Lansley's plans to put the patient at the heart of the NHS have been labelled as "confusing, vague and insulting".

The health secretary pushed ahead with HealthWatch, the new body to champion patients' views, despite ministers being forced last week to apologise and withdraw a consultation on the new watchdog. Ministers had conceded that their original plans had been conceived in haste and without proper consultation.

But Lansley announced that 75 local HealthWatch groups were in place. HealthWatch is supposed to replace local patient involvement networks, known as LINks, in 2012 – bringing "real local democratic accountability and legitimacy" to the NHS "for the first time in 40 years".

Malcolm Alexander, chair of the National Association of Local Involvement Networks Members, said that, instead of increasing budgets to fund the new bodies, cash was being cut even though the government was asking local groups to take on a range of new responsibilities, such as promoting the integration of care and health services and improving choice for patients, without extra money.

Alexander said: "It's pathetic. The consultation had a figure of £20,000, which was confusing and looked like a cut. Then that was withdrawn. Our figures show that networks are having their budgets cut this year by 24% on average."

He said there was no start-up funding for local HealthWatch "pathfinder" groups and no ringfenced money in local authority budgets to run the new bodies.

The money for HealthWatch comes out of local council budgets, which are being cut by 30% over the next four years. "Our own research asked whether these new policies were evolution or abolition. It looks like abolition to us," he said.

John Healey, the shadow health secretary, said: "Patient activists are rightly angry that they are being ignored. Ministers' boast about 'no decision about me without me' is exposed as empty spin. Instead of making flawed policies and then being forced to withdraw them, the government should go one step further and scrap its reckless NHS reorganisation."

Sally Brearley, senior research fellow in patient and public involvement at King's College London, who sat on the prime minister's Future Forum which re-examined the health reforms, said she "shared the concerns".

"There's a lot of extra work to develop these new HealthWatch bodies and they are supposed to be monitoring the NHS as services are being cut and finances are under strain. It's a real issue."

A Department of Health spokesperson said the criticism was misleading.

"The government has not cut funding, and has no plans to do so – in fact, we retained the current level of funding at £27m, rising in line with inflation, for the spending review period."